In two days, on Thursday, December 13th, the US Congress is expected to address a critical issue, one that might affect the entire crypto world. The issue in question revolves around crypto legislation, as two bills are supposed to be introduced. The bills are intended to increase user protection against fraud, and at the same time ensure that the US remains relevant in the crypto and blockchain space on a global scale.
Congress seems to be getting more serious about cryptocurrency.. Scoop: Bipartisan lawmakers are planning to introduce #cryptocurrency bills on Thursday to protect consumers and keep the U.S. competitive https://t.co/V2aw2KQnIc — Kate Rooney (@Kr00ney) December 6, 2018
In the US, Bitcoin (BTC) and Ethereum (ETH) are overseen by a single agency called the CFTC (Commodity Futures Trading Commission). As for every other cryptocurrency or platform, the US SEC is responsible for overseeing them.
Cryptocurrencies have been in circulation for a decade now, but they only caught the attention of the US lawmakers in 2017. This was also during the period when Initial Coin Offerings (ICOs) became popular amongst cryptocurrency-based startups. The problem with ICOs was that they became recognized as security futures. However, as part of new technology, they were completely unregulated.
In 1929, after the stock market crash, lawmakers realized that securities markets in the US are in dire need of regulations. As a result, in 1934, a Securities and Exchange Act was enforced, to protect the US from experiencing another catastrophic event like the one in 1929. The SEC was also established to ensure that the Act would remain enforced adequately at all times. Also, this served as a way of regaining the confidence and trust of the public, and it even helped speed up the recovery of the US economy.
In traditional finance, the SEC is mostly in charge of regulating IPOs (Initial Public Offerings). When it comes to ICOs, they are very similar in concept, the only real difference being the fact that they are performed on top of a blockchain.
However, this small difference is of great importance, as it meant that there are no proper regulations to cover ICOs. In the meanwhile, the ICO popularity grew. While numerous ICOs were real and ended up being successful, a lot of them also failed, and some were even discovered to be scams. Unfortunately, investors had already lost millions by the time they realized their mistake.
The new bills which are to be introduced on Thursday, December 13th, are expected to address these issues. One of the bills is called “Virtual Currency Consumer Protection Act”, and it will establish a report regarding attempts at crypto price manipulation. The report will also cover possible consequences of price manipulation on the economy of the US as a whole.
As for the second bill, it was named “U.S. Virtual Currency Market and Regulatory Competitiveness Act,” and it will provide CFTC with directions regarding their study of crypto and blockchain regulatory laws introduced by other countries. After that, the CFTC will be tasked with recommending proper regulatory standards for the US itself.
Experts believe that the bills will likely be only the first ones in a long line of legislation that will attempt to regulate the crypto space. Numerous others are expected to follow in the coming months, and those in the crypto community are interested to see what will happen.